Depreciation needs to stay as a deductible item. Sure, nobody ever writes a check for it, but is an incentive to invest in newer equipment and technology. It is akin to replacement reserves. It allows companies to invest in their companies to make them stronger. Some companies actually set this aside. Not all, but maybe 20% of the companies I deal with do in some form or another.

These same companies also pay sales tax on the new equipment, as long as it isn't manufacturing equipment (very broad generalization), and then they pay personal property tax on the equipment at a local level as well.

I feel similar about amortization.